TOPICS > Politics

‘Gang of 6′ Plan Could Offer GOP Path to Debt Deal

July 19, 2011 at 12:00 AM EST
President Obama praised the work of the bipartisan "Gang of Six," who released the framework of a deal Tuesday that would cut roughly $4 trillion from the deficit over the next decade. Judy Woodruff and Political Editor David Chalian discuss the state of play in the ongoing debt-ceiling negotiations.
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GWEN IFILL: A deep partisan divide dominated the budget debate in the House of Representatives today, while, over in the Senate, glimmers of bipartisanship were beginning to surface.

NewsHour congressional correspondent Kwame Holman has the story.

KWAME HOLMAN: The House and Senate pursued divergent paths today to cutting the deficit and raising the debt limit, even as yet another possible alternative emerged which garnered a presidential embrace.

In a visit to the Briefing Room with little warning, the president pointed to some progress being made among negotiators, but said more needed to be done.

PRESIDENT BARACK OBAMA: The problem we have now is we’re in the 11th hour and we don’t have a lot more time left.

KWAME HOLMAN: Mr. Obama praised the work of a bipartisan group of senators known as the “Gang of Six.” The group released the framework of a deal today that would cut roughly $4 trillion from the deficit over the next decade.

The savings would come from cuts to discretionary spending, including defense programs, reforms to federal health care programs such as Medicare and Medicaid. And it also would include $1.2 trillion in new revenues.

At the Capitol this afternoon, Senate Republican Leader Mitch McConnell said he would withhold judgment on the plan.

SEN. MITCH MCCONNELL, R-Ky. minority leader: I don’t have an opinion yet. I commend the senators who were involved in it for all the work. They have spent a lot of time on this.

KWAME HOLMAN: The Senate’s majority leader, Democrat Harry Reid, also refrained from immediately endorsing the proposal.

SEN. HARRY REID, D-Nev. majority leader: These are things I’m interested in, but for me to say I love this bill that other people worked on for months and months, I can’t do that.

KWAME HOLMAN: But the framework did get a nod from a member of the Republican leadership, Tennessee’s Lamar Alexander.

SEN. LAMAR ALEXANDER, R-Tenn.: They worked for six months. They have had disagreements. They have been like old married couples. You know, they have quit, and fought and come back. They have — they have studied complex issues. They have come to a bipartisan agreement, and I support it.

KWAME HOLMAN: And the president said the group’s approach was on the same playing field with his vision for deficit reduction.

BARACK OBAMA: The framework that they put forward is broadly consistent with what we’ve been working on here in the White House and with the presentations that I have made to the leadership when they have come over here.

KWAME HOLMAN: The president also said time was running out for symbolic gestures. But as he was speaking, the U.S. House was engaged in a debate on a Republican-led effort to raise the debt-ceiling that appeared destined to fail in the Senate.

The measure, dubbed Cut, Cap and Balance, would allow the government to raise the debt ceiling by $2.4 trillion, but only after immediate spending cuts. It would slash $6 trillion over the next decade, cap next year’s operating budgets for federal agencies, and require Congress to adopt a balanced budget amendment to the U.S. Constitution.

House Majority Leader Eric Cantor said the plan would get the nation’s fiscal house in order.

REP. ERIC CANTOR, R-Va. House majority leader: Cut, Cap and Balance makes sure that we begin to treat taxpayer dollars more responsibly, just like families and businesses do with their own budgets. We need to act today. We cannot continue to kick the can down the road.

KWAME HOLMAN: Democrats, such as Kentucky’s John Yarmuth, accused Republicans of playing politics with the country’s fiscal health.

REP. JOHN YARMUTH, D-Ky.: so, what Cut, Cap and Balance would really mean is slash, shred and punish — punish — slash the budget, shred the safety net, and punish the American citizens who can least afford it.

KWAME HOLMAN: With the president pledging again today to veto the measure, House Speaker John Boehner said alternatives must be considered.

REP. JOHN BOEHNER, R-Ohio speaker of the House: I do think it’s responsible for us to look at what plan B would look like. And the leadership had a long conversation yesterday about plan B. There are a lot of options available to us. There have been no decisions made as yet.

KWAME HOLMAN: A decision must be made soon, though, with the deadline to raise the country’s borrowing limit now just two weeks away.

GWEN IFILL: Now to Judy Woodruff for more.

JUDY WOODRUFF: And we turn to our political editor, David Chalian, for some additional insight into all this.

So, David, let’s talk about this Gang of Six. This is a group we haven’t heard much from recently. What’s behind this proposal that is suddenly getting all this attention?

DAVID CHALIAN: You remember, back last year, the president had a fiscal commission led by Alan Simpson and Erskine Bowles, a bipartisan commission to recommend how to deal with long-term deficit reduction and getting debt under control.

The whole notion of the Gang of Six, its creation, was to try to take those Simpson-Bowles recommendations and turn them into legislation that can pass the Congress. They have been working behind closed doors. Tom Coburn, the Republican from Oklahoma, left the group, came back to the group now. It never quite looked like they were going to be able to produce something.

And to be clear, they still haven’t produced legislation. But today, they emerged with something they have never emerged with before, which is an outline, a framework, because they saw this Aug. 2 debt limit — vote to increase the debt limit as an opportunity to really influence where this conversation is going on the deficit reduction side.

JUDY WOODRUFF: And the president came right out — he’s making a regular habit, I guess, of talking to reporters in the White House Press Briefing Room — and he embraced it — or the idea of it.

DAVID CHALIAN: He did.

First of all, he said it tracks somewhat similarly to what he and Speaker Boehner were discussing. Remember that grand bargain? We know that the president wants a large deal. He was discussing something along the lines of $4 trillion in deficit reduction over 10 years. They’re not quite the same components, but a similar goal with a mix of revenues, increased revenues, and cuts to entitlement programs.

So, that’s why he immediately embraced it, because he hoped maybe that this would have a chance to work its way through Congress as a possible vehicle for a deal in the end.

JUDY WOODRUFF: So you have a couple of senators. We heard Lamar Alexander saying he’s interested. But the Senate is one thing, David. The House is something altogether different.

DAVID CHALIAN: This is entirely the rub right now, Judy, are these House Republicans who have seemed unwilling to consider anything that has a revenue — you know, enhancing revenues as a component to the deal.

I have been on the phone this afternoon with senior Republican leadership aides in the House. This Gang of Six plan, though it does have increased revenues on the side, is not dead on arrival at all. In fact, I think House Republicans, from my sense of my conversations today, might be a little more open to going down this road than that other backup plan we have been talking about for the last several days, that Reid-McConnell plan.

We will get to that in a moment. But in its current form, as the Gang of Six outlined it today, it could not pass the House. And so we’re in the same sort of gridlock.

JUDY WOODRUFF: Because of the revenue piece…

DAVID CHALIAN: Because they don’t like some of the way the taxes are done. They don’t think there are enough Medicare cuts in this to satisfy their base. And there’s no enforcement. There’s no trigger to actually make sure that the cuts do take place over the — long time.

That concerns House Republicans. But they like the fact that the top tax rate in this plan is at 29 percent. That perks up their ears. They’re very interested in that sort of lowering of the rate and broadening the base. That does take place in this tax reform plan that’s inside the Gang of Six notion.

JUDY WOODRUFF: And you mentioned the Reid-McConnell as a backup.

But, meanwhile, David, you were also saying that there are some public opinion polls out there that are playing a role in all this.

DAVID CHALIAN: Right. In addition to the Gang of Six, the other thing is out there today are lots of new polls that show a growing number of Americans saying they are concerned that there would be serious economic implications if the debt ceiling is not raised.

We now have a majority of Americans who express real concern. That’s one number that concerns House Republicans. And the other number is, the Republicans are getting the brunt of the blame. Fifty-eight percent of Republicans in a new ABC News/Washington Post poll out tonight say that their own party has been too resistant to find a deal.

That is having some impact on these House Republicans. That’s why you saw President Obama out there embrace this bipartisan plan that emerges, because he wants to isolate those House Republicans and start picking them off to support a plan, as they realize that the public is not standing with them.

JUDY WOODRUFF: Tracking some other polls.

And just quickly, so, what do we look for next?  

DAVID CHALIAN: Well, I do think we now look to see this Gang of Six plan moving to legislative language, because this is where the cliché is true. The devil is in the details.

JUDY WOODRUFF: And the clock is ticking.

DAVID CHALIAN: And the clock is ticking. And so one House Republican aide said to me today, the good news is we have a good vehicle to consider, because nobody over here really loves the Reid-McConnell plan to give the president authority to raise the debt limit. The bad news is, we don’t have much time to get it done.

JUDY WOODRUFF: Well, we will watch. And I know you will watch.

DAVID CHALIAN: Without a doubt.

JUDY WOODRUFF: David Chalian, thank you.

DAVID CHALIAN: Thank you.